Your Directors present herewith the 70th Annual Report of the Companytogether with the Audited Financial Statements for the year ended 31st March2018.
The performance of the Company for the year is summarized below:
| || ||(Rs in Lakhs) |
|Particulars ||2017-18 ||2016-17 |
|Gross Income ||3337.72 ||3204.43 |
|Profit/(loss) before Interest and Depreciation ||(367.94) ||(33.97) |
|Finance charges ||355.03 ||361.90 |
|Gross Profit/(loss) ||(722.97) ||(395.87) |
|Depreciation and Amortisation expenses ||368.00 ||389.55 |
|Net Profit/(loss) before tax ||(1090.97) ||(785.42) |
|Provision for tax ||165.92 ||(17.57) |
|Net Profit/(loss) after tax ||(1256.89) ||(767.85) |
|Other Comprehensive lncome/(loss) ||3.84 ||(2.54) |
|Total Comprehensive Income ||(1253.05) ||(770.39) |
|Balance carried to Balance Sheet ||(4746.46) ||(3491.91) |
OPERATIONS AND PERFORMANCE
For the year under review Your Company achieved a gross income of Rs.3337.72 lakhs andincurred a loss before tax of Rs.1090.97 lakhs as against the gross income of Rs.3204.43lakhs and loss before tax of Rs.785.42 lakhs for the previous year.
Your Company's operations during the year were impacted by reduced order book for majorpart of the year due to the continued sluggish activity in construction sector. IntenseCompetition and pricing pressure affected the margin of the Company.
The Company was able to collect major portion of the over dues and the income taxrefund which helped in reducing the short term loans. Few of the projects carried overfrom previous year were completed by mid-year. Your Company was able to secure few ordersduring the fourth quarter of the year and now has an healthy order book.
The Company is continuing its efforts for securing fresh orders and speeding upexecution on existing orders to achieve operational turnaround.
On the Property Development business during the year Your Company had acquiredinterest in a real estate project in Coimbatore to maintain the presence in propertydevelopment market.
The depreciation for the year was at Rs.368.00 lakhs as compared to Rs. 389.55 lakhsfor the previous year.
Due to lower volumes / revenue the PBIT for the year was at negative Rs. 735.94 lakhsas compared to negative Rs.423.52 lakhs during the previous year. The finance cost for theyear was almost flat at Rs. 355.03 lakhs as compared to Rs. 361.90 lakhs in the previousyear.
During the year Your Company utilised the existing Plant and Machinery and hence didnot incur any major capital expenditure.
Taking into account overall financial performance of the Company and the accumulatedlosses no dividend is considered for the financial year 2017-18.
The Company also has not transferred any amount to general reserve.
During the year the unclaimed dividend amounting to Rs.43804/- pertaining to dividendfor the year ended 31st March 2010 was transferred to the Investor Education& Protection Fund. The company has uploaded the details relating to unclaimed dividendon its website for the benefit of its shareholders. 18838 Equity Shares on which dividendwas not claimed for 7 years had also been transferred during the year to IEPF Authority asper statutory requirement.
The paid up Equity share capital of the Company as on 31.03.2018 was Rs. 3323.36 lakhs.During the year under review the Company has not issued shares with differential votingrights nor granted stock options nor sweat equity shares. As on 31 March 2018 Mr. M.M.Venkatachalam Chairman was holding 451610 equity shares of Rs. 10/- each and Mr.M.A.M. Arunachalam Director was holding 361610 equity shares of Rs.l0/-each of theCompany. The other Directors of the Company do not hold any shares in the Company.
The paid up Preference Share capital of the Company as on 31.03.2018 was Rs.70000000/-.
DETAILS OF DEPOSITS
The Company has not accepted any Deposits covered under Section 73 of the CompaniesAct 2013 read with the Companies (Acceptance of Deposits) Rules 2014.
PARTICULARS OF LOANS / GUARANTEES GIVEN / INVESTMENTS MADE
The Company has not extended any loans guarantees nor made any investments coveredunder the provisions of Section 186 of the Companies Act 2013.
The Board of Directors have established a review and monitoring process with themanagement to ensure that the risks pertaining to the business are identified steps aretaken to manage and mitigate the same and periodical updates are discussed. The Board hadconstituted a Risk Management Committee details of the same and its terms of referenceare set out in the Corporate Governance Report forming part of the Board's Report.
INDIAN ACCOUNTING STANDARDS (IND AS) - IFRS CONVERGED STANDARDS
The Company has adopted Ind AS with effect from 01st April 2017 pursuant toCompanies (Indian Accounting Standards) Rules 2015 notified by Ministry of CorporateAffairs on 16th February 2015. The Company has completed the modification ofaccounting and reporting systems to facilitate the adoption of Ind AS. The implementationof Ind AS is a significant process adopted from the current financial year and the Companyhas presented the impact of Ind AS transition in the notes to the Financial Statements.
DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS
In addition to the Internal Controls on Operations the Board has laid emphasis onadequate internal financial controls to ensure that the financial affairs of the Companyare carried out with due diligence. Apart from Internal Auditors who review all thefinancial transactions and operating systems the Company has also in place adequateInternal Financial Controls with reference to Financial Statements . During the year suchcontrols were tested and no reportable material weaknesses in the design or operation wereobserved.
At the 69th Annual General Meeting held on 26thJuly 2017 Ms. G.Jalaja Director (DIN: 00149278) retired by rotation pursuant to Section 152(6) of theCompanies Act 2013 and Article 93 of the Articles of Association and was re-appointed asDirector liable to retire by rotation.
RE-APPOINTMENT OF RETIRING DIRECTOR
Based on the recommendation of Nomination & Remuneration Committee and approval ofthe Board Mr. M.M. Venkatachalam Director (DIN: 00152619) who retires by rotationpursuant to Section 152 (6) of the Companies Act 2013 and
Article 93 of the Articles of Association at the forth coming Annual General Meetingand being eligible offers himself for re- appointment.
APPOINTMENT OF KEY MANAGERIAL PERSONNEL
During the year Mr. N. Velappan was re-appointed by the Board as Manager of theCompany and a Key Managerial Person from 01st May 2017 to 30thApril 2018 under Section 203 of the Companies Act 2013 which was approved by themembers at the 69th Annual General Meeting of the Company held on 26thJuly 2017. The Board has now extended the tenure of Mr. N. Velappan as Manager for theperiod of 1 Year from 01st May 2018 to 30th April 2019 for whichthe approval of members is being sought in the ensuing Annual General Meeting.
EVALUATION OF BOARD'S PERFORMANCE
As per the provisions of Section 134(3)(p) of the Companies Act 2013 and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 the Board has carried out anannual performance evaluation of its own performance the directors individually as wellas evaluation of the working of its Audit Committee Nomination and RemunerationCommittee Risk Management Committee and Stakeholders Relationship Committee. The mannerin which the evaluation has been carried out is explained in the Corporate GovernanceReport.
FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
On their appointment Independent Directors are familiarized about the Company'sbusiness and operations. Interactions with senior executives are facilitated to gatherinsight specific to the Company's operations. Detailed presentations are made available toapprise about Company's history current business plan and strategies. As part of thefamiliarization programme a handbook is provided to all Directors including IndependentDirectors at the time of their appointment. The handbook provides a snapshot to theDirectors of their duties and responsibilities rights process of appointment andevaluation compensation Board and Committee procedures and expectation of variousstakeholders.
The details off a miliarization programmes as above are also disclosed on the websiteof the Company at the link:http://www.coromandelengg.com/lnv_ policies.html.
DECLARATION BY INDEPENDENT DIRECTORS
The Company has received necessary declaration from each Independent Director of theCompany under Section 149(7) of the Companies Act 2013 (Act) stating that the IndependentDirectors of the Company met with the criteria of Independence laid down in Section 149(6) of the Act and Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015.
Pursuant to Section 178(3) of the Companies Act 2013 the Board on the recommendationsof the Nomination and Remuneration Committee framed a policy for selection and appointmentof Directors Senior Management and other employees and their remuneration. The details ofthe Remuneration Policy are stated in the Corporate Governance Report.
NUMBER OF MEETINGS OF THE BOARD
During the financial year ended 31st March 2018 the Board had met Six ( 6 )times on 29hApril2017 25th July 2017 26th October2017 08th January 2018 25th January 2018 and 22ndMarch 2018. The Audit committee met (4) times on 29th April 2017 25th July2017 26th October 2017 and 25th January 2018. The details of thesaid meetings are given in the Corporate Governance Report . The intervening gap betweenthe meetings was within the period as prescribed under the Companies Act 2013.
DIRECTOR'S RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors' make the following Statements in terms ofSection 134(3)(c) of the Companies Act 2013:
that in the preparation of the annual financial statements for the year ended 31stMarch 2018 the applicable accounting standards have been followed along with properexplanations relating to material departures if any;
that the Directors had selected such accounting policies as mentioned in NoteNo. 3 of the Financial Statements and applied them consistently and made judgments andestimates that are reasonable and prudent so as to give a true and fair view of the stateof affairs of the company as at 31" March 2018 and of the loss of the company forthe year ended on that date;
that the directors had taken proper and sufficient care for the maintenance ofadequate accounh'ng records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the company and for preventing and deteching fraud andother irregularities;
that the annual accounts for the year ended 31" March 2018 have beenprepared on a 'going concern' basis;
that the directors had laid down internal financial controls to be followed bythe company and that such internal financial controls are adequate and were operatingeffectively;
that the directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
RELATED PARTY TRANSACTIONS
All transactions with Related Parties entered during the financial year were in theordinary course of business and on an arm's length basis. There were no materiallysignificant related party transactions made by the Company with Promoters Directors KeyManagerial Personnel or other designated persons which may have a potential conflict withthe interest of the Company at large. None of the Directors have any pecuniaryrelationship or transactions vis-a-vis the Company other than sitting fees andreimbursement of expenses incurred if any for attending the Board meeting.
The Related Party Transactions are placed before the Audit Committee for review andapproval as per the terms of the Policy for dealing with Related Parties. Prior omnibusapproval of the Audit Committee is obtained on a quarterly basis for transactions whichare foreseen and of repetitive nature. The statement containing the nature and value ofthe transactions entered into during the quarter is presented at every subsequent AuditCommittee meeting by the CFO for the review and approval by the Committee.
Further transactions proposed in subsequent quarter are also presented. Besides theRelated Party Transactions are also reviewed by the Board on an annual basis. The detailsof the Related Party Transactions are provided in the accompanying financial statements.There are no contracts or arrangements entered into with Related Parties during the yearended 31" March 2018 to be reported under section 188(1) of the Companies Act 2013.The policy on dealing with Related Parties as approved by the Board is uploaded and isavailable on the Company's website at the following link: http://www.coromandelengg.com/lnv_policies.html.
EXPLANATION AND COMMENTS
The reports of statutory auditors and that of the secretarial auditors are selfexplanatory and have no adverse comments.
MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF THEFINANCIAL YEAR AND THE DATE OF THE REPORT
There are no material changes or commitments after the closure of the financial year.
COMPOSITION OF AUDIT COMMITTEE
Audit Committee constituted by the Board pursuant to Section 177 of the Companies Act2013 consists of the following members:
Mr. P. Nagarajan -Chairman
Mr. M.A.M. Arunachalam -Member
Mr. N.V. Ravi -Member
Mr. R. Surendran -Member
The Board has accepted the recommendations of the Audit Committee and there were noincidences of deviation from such recommendations during the financial year under review.
The Company has devised a vigil mechanism in pursuance of the provisions ofSecfionl77(10) of the Companies Act 2013 for Directors and employees to report genuineconcerns or grievances to the Audit Committee in this regard and details whereof areavailable on the Company's website.
NOMINATION AND REMUNERATION COMMITTEE
Pursuant to Section 178 of the Companies Act 2013 the Board has constituted aNomination and Remuneration Committee consisting of the following members:
Mr. N.V. Ravi-Chairman
Mr. M.M. Venkatachalam-Member
Mr. P. Nagarajan-Member
The said committee has been empowered and authorized to exercise powers as entrustedunder the provisions of Section 178 of the Companies Act 2013. The Company had laid outand following the policy on director's appointment and remuneration including criteria fordetermining qualifications positive attributes independence of a director and othermatters provided under sub section 3 of Section 178 of the Companies Act 2013.
Policy on Criteria for Board Nomination and Remuneration policy is available in thewebsite of the Company http://www.coromandelengg.com/ lnv_policies.html.
CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY
The Company through its Corporate Social Responsibility Committee had formulated a CSRpolicy as required under Section 135 of the Companies Act2013.
The following is the composition of the Corporate Social Responsibility Committee.
Mr. R. Surendran -Chairman
Mr. M.A.M. Arunachalam -Member
Ms G. Jalaja -Member
SCOPE OF CSR POLICY
This policy will apply to all projects/ programmes undertaken as part of the Company'sCorporate Social Responsibility and will be developed reviewed and updated periodicallywith reference to relevant changes in corporate governance statutory requirements andsustainable and innovative practices. The policy will maintain compliance and alignmentwith the activities listed in Schedule VII and Section 135 of the Companies Act 2013 andthe rules framed thereunder.
CSR POLICY IMPLEMENTATION
The Company shall undertake CSR project/ programmes identified by the CSR Committee andapproved by the Board of Directors in line with the CSR Policy.
The CSR Policy of the Company is uploaded in the website of the Company http://www.coromandelengg.com/lnv_policies.html.
REASON FOR NOT SPENDING ON CSR ACTIVITIES
Since the average of net profit earned by the Company in the preceding three financialyears is negative the Company was not required to spend on the CSR activities during thefinancial year 2017-18.
SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
The company has not received any significant and material orders passed by theregulators or courts or tribunals impacting the going concern status and company'soperations in future.
The appointment of M/s. CNGSN & Associates LLP holding Firm RegistrationNo.004915S as Statutory Auditors of the Company to hold office from the conclusion of69th Annual General Meeting until the conclusion of 74th AnnualGeneral Meeting was approved by the members at the 69th Annual General Meetingsubject to the ratification of the appointment by the members at every annual generalmeeting thereafter. M/s CNGSN & Associates LLP have confirmed their eligibility underSection 141 of the Companies Act 2013 and the Rules framed thereunder for theirre-appointment as Auditors of the Company. As required under Regulation 33 (l)(d) of theSEBI (Listing Obligations & Disclosure Requirements) Regulations 2015 the Auditorshave also confirmed that they hold a valid certificate issued by the Peer Review Board ofthe Institute of Chartered Accountants of India. The Board based on the recommendation ofAudit Committee proposes the ratification of the appointment of M/s CNGSN &Associates LLP to hold office until the conclusion of 71st Annual Generalmeeting by the members .
Pursuant to Section 148 of the Companies Act 2013 read with the Companies (CostRecords and Audit) Second Amendment Rules 2017 Mr. N.V. Thanigaimani Cost Accountant(Membership No.15557) was appointed as Cost Auditor of the Company for the financial year2017-18. The remuneration payable to the cost auditor is required to be placed before theMembers in a general meeting for their ratification. Accordingly a resolution seekingratification for the remuneration payable to Mr. N.V. Thanigaimani is included at Item No.4 of the Notice convening the Annual General Meeting.
Pursuant to Section 204 of the Companies Act 2013 read with the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 the Company had appointed Ms.Srinidhi Sridharan & Associates Chennai to undertake the Secretarial Audit of theCompany. The Secretarial Audit Report is annexed herewith. During the year under reviewthere has been no qualification reservation or adverse remark or disclaimer in theirreport.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report highlighting the business details isattached and forms part ofthis report.
CORPORATE GOVERNANCE REPORT
All material information was circulated to the directors before their meeting or placedat their meeting including minimum information required to be made available to the Boardas prescribed under Part A of Schedule II of Sub- Regulation 7 of Regulation 17 of theListing Regulations.
In terms of Regulation 34 of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 a report on CorporateGovernance along with a Certificate from a Practicing Company Secretary confirming thecompliance with the conditions of Corporate Governance as stipulated under Part E ofSchedule V of Sub-Regulation 34(3) of the Listing Regulations is attached to this report.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company has in place a prevention of Sexual Harassment and Grievance HandlingPolicy in line with the requirements of The Sexual Harassment of Women at theworkplace(Prevention Prohibitions Redressal) Act 2013.
Internal Complaints Committee (ICC) has been set up to redress complaints receivedregarding sexual harassment. All employees (permanent contractual temporary andtrainees) are covered under this policy.
The following is the summary of sexual harassment complaints received and disposed offduring the year 2017-18:
No. of complaints received - Nil
No. of complaints disposed off - Not Applicable
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS ANDOUTGO
The Company does not have any commercial activity that calls for conservation of energyand/ or technology absorption attracting disclosure in pursuance of Rule 8(3) of theCompanies (Accounts) Rules 2014. During the year the Company did not have any foreignexchange earnings and outgo.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the annual return in the prescribed formMGT-9 as per Section 92(3) of the Companies Act 2013 read with Rule 12 of the Companies(Management and Administration) Rules 2014 is annexed to and forms part of this Report.
PARTICULARS OF EMPLOYEES
The ratio of remuneration of each Director to the median of employees' remuneration asper Section 197(12) of the Companies Act 2013 and information relating to employees to bedisclosed under Rule 5 of the Companies (Appointment & Remuneration of ManagerialPersonnel) Rules 2014 is annexed to and forms part of this report.
LISTING OF SECURITIES IN STOCK EXCHANGES
The Company's Equity Shares are presently listed on BSE Ltd.
Your Company has been certified under ISO 9001:2008 for quality management system andBS OHSAS 18001:2007 for safety management system in design and establishment of propertydevelopment construction of residential commercial and industrial projects supportingservices like electrical mechanical and plumbing works.
Your Directors place on record their appreciation for the continued co-operationsupport and assistance extended to the Company by its Bankers Shareholders Government ofIndia and Government of Tamil Nadu.
| ||On behalf of the Board |
|Place: Chennai ||M.M.VENKATACHALAM |
|Date: April 26 2018 ||(DIN:00152619) |
| ||Chairman |